Monday news from Balmoral Resources, Midway Gold, and Abitibi Royalties

POSTED ON April 20, 2015 BY James Fraser
CATEGORY Abitibi Royalties, Balmoral Resources, Midway Gold, Stories,

Balmoral land position (at the top in orange). Location, Location, Location. (Image: Balmoral)

Here is a look at some of the news releases that caught my eye this morning with some additional comments on each.

Balmoral Resources - (BAR:TSX) - Balmoral Resources is out with assays from 9 holes from the 2015 winter drill program at the Martiniere property in Quebec. The Martiniere property forms part of Balmorals massive 700+ square kilometre Detour Trend Project and is located approximately 40 km west of Balmoral's Grasset Ni-Cu-PGE discovery.

Balmoral has assembled a massive land position in one of the best proven gold belts (Detour Trend) in the world. It reminds me of Cayden before getting taken over by Agnico Eagle. I was surprised at that deal as Cayden was still fairly early stage with no resource estimates completed but it shows me majors are hungry for large land positions in proven mining areas.

Highlights included 19.55 grams per tonne gold over 44.45 metres, including 34.84 grams per tonne gold over 24.14 metres in hole MDE-15-166, one of the strongest intercepts to date from the Footwall zone, and 4.28 grams per tonne gold over 53.78 metres from the combined Lower Bug Lake and Footwall zones in hole MDE-15-73, including 7.01 grams per tonne gold over 22.48 metres through the Footwall zone.

Nice high grade intercepts in both holes that have caught the markets attention with BAR trading up 11% in early trading even though these holes were infill.

"We are pleased to see our initial winter assays meet, or in several cases exceed, results from our previous work in this portion of the Bug Lake Gold Trend and pleasantly surprised with the identification of high-grade base metal sulphides potentially associated with the Martiniere East VMS system" said Darin Wagner, President and CEO of Balmoral Resources.

In 2014 Balmoral was one of the best performing mining equities on the TSX as a result of exploration success and has since pulled back. The management team is some of the best in the business led by CEO Darin Wagner. Mr. Wagner has one take over under his belt previously selling West Timmins Mining to Lake Shore Gold for $424 million.

Balmoral is also actively working on the Grasett NI-CU-PGE discovery. With 2 exciting exploration projects and a working capital position of $12.8 million according to an April presentation Balmoral is one of the few exploration stocks on my radar.

Read: Balmoral Intersects 19.55 g/t Gold Over 44.45 Metres, Bug Lake Gold Trend, Martiniere Property, Quebec

Midway Gold - (MDW:TSX) - Midway Gold is out with a corporate update discussing a new debt financing and an update on the Pan mine operations. Midway has closed a $10.5 (US) million dollar debt financing with Hale Capital partners.

The loan includes a 2-per-cent origination fee and bears interest at 13.5 per cent per annum. An initial draw of $3.85-million (U.S.) was made at closing.

Hale Capital at the beginning of April owned 17,837,838 shares of Midway (almost as much as me - kidding) so they do have a vested interest in seeing Midway succeed.

Previously Midway had announced a $5 million dollar working capital shortfall as the Pan mine had several delays in reaching production. The stock sold off considerably on this news and other issues (grade uncertainty). Today's financing should alleviate one of those concerns in the market.

Bill Zisch, president and chief executive officer of Midway, stated: "We are appreciative of the financial support that has been provided by a key investor, Hale Capital. With this support we will continue to work diligently to complete commissioning of the Pan mine."

On the operations side Midway has produced 2300 ounces of gold and continues to ramp up production. Grades issues continue to be a problem but Midway is working on rectifying this.

Bill Zisch stated: "We will report on our resource modelling to address some of the uncertainty associated with our grade variances when that exercise is complete. As we progress through a typical start-up of operations, we will continue to improve efficiencies and maximize value of the Pan mine."

I continue to hold my Midway shares after writing this article.

Read: Midway Secures Financing For Pan Mine And Provides Update Of Operations

Abitibi Royalties - (RZZ:TSXV) - A small milestone event for Abitibi Royalties as they have received first cash flow. A $67,500 dividend payment was received from the shares held of Yamana Gold.

"Receiving our first dividend payment is an important milestone and something very uncommon for a mining company with our market capitalization. This payment is the first in what is expected to be a growing and recurring stream of cash flows," stated Ian Ball, president.

I personally love the royalty business and follow all the royalty companies.

I like Abitibi stock for two main reasons.

1. Low float only 10.8 million shares outstanding.

2. Cash flow already. Abitibi will not have to complete another equity offering unless management chooses to do so. Cash is king especially in a weak junior mining market.

I would imagine Osisko Royalties has this one on the takeover watch list.

Read: Abitibi Royalties Receives First Cash Flow

Discuss in CEO Live – What is catching your eye today?

This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence. Author owns a position in Midway Gold and is therefore biased.

James Fraser

Mr. Fraser joined CEO.ca in October 2014. He is passionate about the mining industry. His passion led to co-authoring the e-book "Mining Stocks Investor Guide: A Guide to Investing in Mining Companies." He has a finance background and has completed his Canadian Securities Course (CSC) and Conduct and Practices Handbook (CPH). When Fraser is not "digging" up the latest mining stock, he can be found enjoying a wide variety of sports or travelling the world. More →

Twitter: @miningstocks

james@miningstocksguide.com

James Fraser

Twitter: @miningstocks

james@miningstocksguide.com

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